Few things are as frightening or as exciting as starting a new business. Businesses may take several forms – the simplest being a sole proprietorship. A limited liability company, or LLC, is a more complicated business form, but it offers certain advantages such as giving owners, who are known as members, protection from personal liability for business debts and obligations. The Illinois Limited Liability Company Act governs Illinois LLCs. Under the Act, LLCs come into existence upon the acceptance of Form LLC-5.5 by the secretary of state.
Settle the essential elements of your business and finalize your business plan. Starting a new business is not risk-free; determine such aspects such as where you intend to run your business, whether you intend to hire employees, and how you intend to fund the endeavor.
Choose a name for your LLC. The name must include the words, "Limited Liability Company," or the abbreviation, "L.L.C." or "LLC." The name should not be the same as any other name that is registered with the state of Illinois. You can check name availability through the Illinois Secretary of State website, or by calling 217-524-8008. The secretary of state’s office reserves the right to make the final determination on the availability of limited liability company names.
Choose a registered agent. The agent has authority to accept service of process for the LLC, and will also receive and exchange information between the company and the secretary of state’s office. The registered agent must have an Illinois street address, not just a P.O. box.
Complete Form LLC-5.5, the articles of organization for LLCs in Illinois. The form is available through the Illinois Secretary of State website -- and you can complete it online. The form is relatively straightforward; however, in part 8, you must determine whether your LLC is “manager-managed” or managed equally by all members.
File your articles of organization online, or print out completed Form LLC-5.5 -- and mail it to the Illinois Secretary of State. The address is on the form. You must also remit the required filing fee.
Consider drafting an operating agreement, especially if you intend to have multiple members in your LLC. Operating agreements are contractual documents that set forth the rules governing the operation of the business, including the relative rights and responsibilities of each member. While most states, including Illinois, do not require LLCs to have an operating agreement, this document can help establish expectations early on -- and may prevent or otherwise help resolve disputes should they arise.
It is always advisable to seek legal counsel before proceeding to set up your LLC.
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